Saturday, February 29, 2020

Brits Worried The Euro Is Ready To Implode

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Just when investors thought the Euro crisis was over comes research showing that financially-savvy Brits say they are concerned about the collapse of the currency and what it means for them.

The study by wealth advisors Towry revealed that 13% of Brits have Euro collapse fears, particularly now France is back in recession and the Eurozone has entered the sixth straight quarter of negative growth.

Should the Eurozone financial crisis drag the UK back into recession then 32% of British investors say they would change their spending habits. This figure rises to 36% for those aged 40 and over.

However, 21% say that a jump in the rate of inflation would also force them to change their spending habits while another 18% say that an interest rate rise would also help close their wallets.

Another reason for people to change their spending habits, claimed by 4% of people, is if they were auto-enrolled onto their firm’s pension scheme.

Euro concerns

Towry’s head of investment, Andrew Wilson, said: “Brits are concerned about the Euro and the knock-on effects that the economic climate will bring to a person’s financial circumstances.”

He added that those fears appear to be increasing with poor economic data from Italy and France as well as the crisis in Cyprus affecting confidence.

He says that it is important that people plan for their financial futures and review their plans regularly to cater for unexpected financial problems in the Eurozone.

Meanwhile, the lack of confidence from British investors has been underlined by a survey of intermediaries who say they are increasingly nervous about the precarious state of the world’s economic health.

Nearly three-quarters of them confessed that the future of the Eurozone was their biggest worry over the next six months, according to the latest Barings Investment Barometer.

Inflation worries

There are also fears of how over-leveraged economies, such as Cyprus, can hope to repay their debts.

The asset management firm also says there are fears that the UK will soon experience higher than expected inflation and for its impact on cash investments.

However, a growing number of advisors are also predicting that the UK’s economy is about to enter a period of stagflation – which is when there is high inflation coupled with weak GDP growth.

Rod Aldridge, from Baring’s, said: “It’s not surprising that intermediaries are concerned about the world’s economic health, especially since the recent turmoil seen in the Eurozone.”

He added that when Cyprus is removed from the Eurozone picture, the economy looks tough – though not as resilient as it was last autumn and that the European Central Bank’s move to improve matters should work in difficult circumstances.

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